Updated: Nov 3, 2021
Happy New Year 2021! Gosh it feels good to say that! We have survived the infamous 2020 (the year that changed us all) and made it through some challenging and difficult times. Though the road ahead is not yet peachy, with the new year comes new opportunities to reset our mindset, refocus on our goals and hope for a better more prosperous year. A new year can mean a fresh start, new chapter and a time to set our intentions on the goals and dreams we hope to achieve in this new season. Money has so much power and often lack of financial resources can cause stress and limit our abilities to dream. Not having to routinely worry about money can no doubt reduce stress and help you to live your best life. If you have financial wellness as one of your 2021 goals, below I am sharing 5 tips that can help you manage your financial health better and conquer your money fears. As a disclaimer, I am not a financial expert and tips are being shared for informational purposes only. Everyone's financial situation is different and only you know which of these tips may work for your financial goals and specific case.
Budget---------Create a budget and know where your money is going each month. It's so important to know how much income you have to work with, which bills are top priorities and how much discretionary spending you have after bills are paid, if any. Setting a budget can help you to improve your spending habits and help you to prioritize your spending and see clearly where your money is going each month.
Pay Bills on Time--------Automate bill pay for certain bills is one way that you can ensure that bills are paid on time. However, not all bills should be automated. For me, this works best for bills that are essential and top priority, the monthly amount is fixed and won't fluctuate from month-to-month, and you can set payment to be deducted on a particular date each month that works best for you. You can set automatic bill pay and won't have to worry about late payment fees and forgetting to pay an important bill. These bills may include things like your mortgage/rent, student loans, car insurance and cell phone (assuming you have an unlimited cell phone plan and know exactly how much will be deducted each month).
Grow Your Money----------Like automated bill-pay, setting up automatic saving and investing is one sure way to ensure that your saving/investing box is checked each month and you are meeting your saving/investing goals. Once you have a budget and you know what your income is, how much to deduct for bills, whatever is left over can be set aside for discretionary spending, and saving/investing (compound interest is your best friend). I believe no matter how much income you have or how limited your financial resources, you can still save even if it's just a dollar here and there. For example, you can automate a specific amount to be deducted automatically from checking to saving account each month, so you won't have to think about it and freeing time so you can focus on other things. Investing brokerages like Vanguard, RobinHood and ElleVest allows you to set up automatic investments into Index funds, stocks and saving/retirement accounts as well. Don't forget to enroll in the employer sponsored programs like a Pension, 401k, IRAs or FSA (if you have a lot of out-of-pocket medical expenses), which most often will be pre-tax deductions and can reduce your overall tax liability. Saving for retirement and/or short-term goals like saving for a house, paying off debt and an emergency saving fund can really bring you peace of mind and help you to conquer your money fears.
Get Financially Organized----------Becoming financially organized is also about becoming financially literate. Take the time to research and educate yourself about tools and resources that are available to help you make better or more informed financial decisions. You can find educational online resources that offer comprehensive, easy-to-read guides on financial literacy on annuity.org as an example. Knowledge is power so know what is going on with your finances and get financially curious about tools that can help you to achieve your money goals. For example, open your mails regularly and read bank/credit card statements to confirm charges and immediately dispute any suspicious and unauthorized activity/purchases. Often time, you may be able to call a company and discuss a late payment fee and get fee waived if you catch it early enough. Don't forget to periodically reach out to service providers to make sure you are getting the best deal/promotions available.
Reward Yourself---------Treat and reward yourself for your financial discipline and hard work. However, budget for the amount you need to treat yourself and do something nice for you! Selfcare is a priority always! And to drive this point home, I will conclude with this quote: "we don't just live to pay bills and die."